First, a quote from our resident expert, Sr. Loan Officer of Nova Home Loans, Jeannie Bolger:
Effective June 11, 2012–for any FHA note that was endorsed by HUD on or before May 31st, 2009–qualifies for reduced MIP on a Streamline Refinance (No Appraisal). Upfront MIP goes to .01% and Annual MIP will be .55%. Current upfront MIP is 1.75% and the Annual is 1.25%. HUGE SAVINGS.
What? You don’t speak Klingon or Mortgagease?
This may help.
The Federal Housing Administration (FHA) is a branch of the Department of Housing and Urban Development (HUD). The FHA was developed during the Great Depression as as an effort to stimulate the real estate housing market. The main purpose of the FHA is to encourage home ownership in the United States. To accomplish this, the FHA insures mortgages against the default of borrowers.
Do you have a current FHA loan (note) that was endorsed (or closed) by HUD prior to May 31, 2009? If so, your FHA loan qualifies for a significant reduction in your upfront Mortgage Insurance Premium (MIP; an insurance policy that compensates lenders/investors for losses in the event of a defaulted mortgage loan) on a Streamline Refinance (No Appraisal).
The current upfront MIP is 1.75%. Let’s say your FHA Streamline Refinance of your home is for a new $100,000 mortgage. The FHA will charge you $1,750 upfront on the mortgage insurance premium (MIP). You pay this at closing and the $1,750 payment automatically rolls into your new loan balance.
On June 11, the new upfront MIP will be .01% This is a HUGE SAVINGS. Using the $100,000 new mortgage example above, you would only pay $1 !
Also beginning June 11, 2012, the FHA will reduce it’s 1.25% annual MIP ($1,250) to just .55 % for certain FHA borrowers (or $550)–more than a 50% savings!
This is one way that FHA can make a real difference to help homeowners who are doing the right thing, paying their bills on time and want to take advantage of today’s low interest rates. By significantly reducing costs for these borrowers, we can make certain they cut their monthly mortgage burden which will benefit the housing market and the broader economy in the process,” said Federal Housing (FHA) Commissioner, Carol Galante. Read the full HUD Press Release here.
Read Jeannie Bolger’s quote at the top of this post, again, and you’ll be amazed at how much
Klingon Mortgagease you speak!
REMEMBER: For home loans endorsed by HUD before May 31, 2009
PLEASE NOTE: Loan application may be started prior to June 11th, but FHA case # must be ordered after June 11th, 2012 to qualify for program and reduced MIP.
Call Jeannie Bolger, Sr. Loan Officer Nova Home Loans, for more information: (602) 550-8674